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Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption

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  • Joshua Graff Zivin
  • Matthew Neidell
  • Wolfram Schlenker

Abstract

In this paper, we examine the impact of poor water quality on avoidance behavior by estimating the change in bottled water purchases in response to drinking water violations. Using data from a national grocery chain matched with water quality violations, we find an increase in bottled water sales of 22 percent from violations due to microorganisms and 17 percent from violations due to elements and chemicals. Back-of-the envelope calculations yield costs of avoidance behavior at roughly $60 million for all nationwide violations in 2005, which likely reflects a significant understatement of the total willingness to pay to eliminate violations.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16695.

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Date of creation: Jan 2011
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Publication status: published as Joshua Graff Zivin & Matthew Neidell & Wolfram Schlenker, 2011. "Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption," American Economic Review, American Economic Association, vol. 101(3), pages 448-53, May.
Handle: RePEc:nbr:nberwo:16695

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  1. Wolfram Schlenker & Sofia B. Villas-Boas, 2009. "Consumer and Market Responses to Mad Cow Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 91(4), pages 1140-1152.
  2. Harrington, Winston & Portney, Paul R., 1987. "Valuing the benefits of health and safety regulation," Journal of Urban Economics, Elsevier, vol. 22(1), pages 101-112, July.
  3. Timothy K.M. Beatty & Jay P. Shimshack & Michael B. Ward, 2005. "Are Mercury Advisories Effective? Information, Education, and Fish Consumption," Discussion Papers Series, Department of Economics, Tufts University, Department of Economics, Tufts University 0502, Department of Economics, Tufts University.
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Cited by:
  1. Rohlf, Alexander & Römer, Daniel & von Graevenitz, Kathrine, 2014. "The Effect of Emission Information on Housing Prices in Germany," Working Papers, University of Heidelberg, Department of Economics 0554, University of Heidelberg, Department of Economics.
  2. Janet Currie & Joshua S. Graff Zivin & Katherine Meckel & Matthew J. Neidell & Wolfram Schlenker, 2013. "Something in the Water: Contaminated Drinking Water and Infant Health," NBER Working Papers 18876, National Bureau of Economic Research, Inc.
  3. Christopher R. Knittel & Douglas L. Miller & Nicholas J. Sanders, 2011. "Caution, Drivers! Children Present: Traffic, Pollution, and Infant Health," Working Papers, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research 1113, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  4. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," NBER Working Papers 18935, National Bureau of Economic Research, Inc.
  5. Seo, Misuk & Pape, Andreas Duus, 2011. "Reports of Water Quality Violations induce Consumers to buy Bottled Water," MPRA Paper 28207, University Library of Munich, Germany.
  6. Nicholas J. Sanders, 2012. "Toxic Assets: How the Housing Market Responds to Environmental Information Shocks," Working Papers, Department of Economics, College of William and Mary 128, Department of Economics, College of William and Mary.

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